Thought I explained it pretty clear in my last post.
We come from different perspectives here, which is why you're not understanding what I'm saying. Things will always continue to sell when priced above their worth/value
That doesn't mean they are priced above their "value" -- it means that they have more value to some people than others. Value is subjective.
because there will always be people that won't care enough to wait for the price to drop (I must have this "NOW" mentality). This sort of blind purchasing is extremely common when it comes to brand loyalty (Apple fans, Intel fans, BMW fans) and is often used to justify the purchase price of a product.
Yes, (1) the product is worth more to some than others, and (2) some people are prepared to pay a premium to have the newest shiniest toy. Inevitably if the manufacturer sees that they can charge these people a premium they will use a higher initial price (like I mentioned before, this is a way for them to maximize sales revenue by catering to a variety of buyers).
They also use price discrimination via various rebate programs -- the cheapskates will wait until they can get it very cheaply, others will pay at some other point on the price curve.
First, there's what the product costs to make, then there's the profit margin. Usually there is a nice balance between the vendor selling the products and the company that made the products so each gets a profit they feel comfortable with. Depending on the product we're discussing, the final sales price varies in amount multiplied by the cost to make.
You can if you like decompose cost to the consumer as cost to make the product multiplied by profit margin, but that's not going to shed much light on the situation for two reasons. One is that costs are only relevant to the extent that they affect the supply curve. The second is that it is not absolute costs, profits and utility that matter, it is the marginal numbers.
When people do care, and sales are being hurt, the prices go down.
That might happen, or people might decline to buy the product, and the manufacturer are happy to sell a low volume of the product at a high price. Or the manufacturer might decide to use price discrimination to allow them to charge higher prices to people who are willing to pay them without losing more price sensitive customers (e.g. academic editions of software packages, rebate programs, etc).
Some companies (clothing companies) get away with a huge profit while others (video game industry, for example) cannot charge much more than the cost-to-make without causing a huge sales loss.
Ideally a product will be at a price where there is a nice balance between what the consumer pays, what the company profits are, and what the product cost to make. When it isn't people complain.
And that's the part I totally don't get. As the consumer, you get to determine what the marginal utility of the product is for you
. You can purchase or decline to purchase. You don't get to dictate what the marginal value of a sale is to the manufacturer, nor do you get to dictate what the marginal utility to any other buyer is.
For someone who doesn't find the product to meet their subjective
notion of value, declining to purchase makes sense. Just a reminder -- I am one of the people who declined to purchase the mark III.
If the complainers really were right, the manufacturer would be forced to reduce their price to accomodate the demands of the market place. But if this were the case, there would be no need to complain, just wait patiently for the manufacturer to get their introduction to reality. In this case, in my opinion, it is the complainers who are being introduced to reality (and aren't terribly happy with the process)
. And yes, I believe Canon will still be making a profit if it cost the same as the D800. Right now they're squeezing out an extra $500 because enough people are willing to pay it (while a whole lot of other people are not).
But that's smart -- they are using price discrimination to extract a premium from those who are willing to pay it. If it turns out that there are large numbers who would buy it for $3200 but not for $3000, they will probably lower their price (but not until they can build them fast enough to meet demand for those who want it at 3500)